Informal competition and sales of new offerings in emerging markets: The role of Non-Market effort and offerings newness

Abstract

Although research has argued for introducing new offerings in emerging markets to overcome informal competition (IC), the literature remains scant on the impact of IC on the success of new offerings in these markets. In this paper, we draw on the attention-based view to develop a conceptual framework to probe the effect of IC on the sales of new offerings in emerging markets. We use data from 2,399 formal firms with new offerings operating in 28 countries across Eastern Europe and Central Asia to test this framework. The findings show that the effect of IC on sales of new offerings is mediated by non-market effort. Such a mediating effect is strengthened when formal firms’ offerings are new to the market. We discuss the complexity of the IC-sales of new offerings relationship, the implications for research and practice, and outline a research agenda on the issue of IC in marketing management research.